US jobs market may be primed for a 'full recovery', Challenger says

The American jobs market may be primed for a full recovery, one of the country's most influential outplacement firms said.

According to Challenger, Gray and Christmas, US-based companies announced plans for 34,531 job cuts in February.

That was 57% less than in the month before and the lowest monthly tally since December 2019.

"The churn has come to a halt. If healthy job creation follows, this could mean a full recovery is on the horizon, especially as companies see an end to the pandemic in sight,” said Andrew Challenger, senior vice president of Challenger, Gray and Christmas.

"If we do not see jobs begin to return, we could be entering a stagnation cycle, potentially keeping the currently unemployed out of work longer. The good news is we are seeing a high number of hiring plans, particularly in Retail, Entertainment, and Health Care, which were hit hard due to the pandemic."

In parallel, companies also announced plans for 146,403 hiring last month, Challenger said, led by Retail.

However, whereas job cut announcements among retail firms were running at 10,616 or 43% below the previous year's level, year-to-date energy sector firms had disclosed plans for 3,736 layoffs or 59% more than in 2020.